Argentina: More and more angel investors are willing to finance projects

May 14, 2019
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This article was written and published in Spanish and has been translated into English via Google Translate. Click here to read the original article.

The economy is still showing signs of recovery. Consumption has not picked up and this impacts the plans of companies to the point that they are already working with barely half of their intended capacity, as reported by INDEC itself.

The proximity of the elections adds uncertainty and puts a strong stop to initiatives in the private sphere: according to the consultant Orlando Ferreres, at the beginning of this year investments fell to its worst numbers recorded since 2014.

Despite the bleak panorama, Argentina has the best entrepreneurial context in the region, according to Global Entrepreneurship, which surveys the 49 leading economies in the world. Moreover, it is ranked 21st in the international ranking, ahead of Mexico (23rd), Chile (26th), Colombia (32nd), Uruguay (35th) and Brazil (48th).

In addition, it highlights that the good performance is, to a large extent, product of the approval of the Law of the Entrepreneur and the consolidation of a growing ecosystem of investors.

This year, there could even be another rule that encourages even more the financiers to "sink" capital in this type of initiative: the bill of Economy of Knowledge that President Macri sent to Congress.

According to the president, his approval will benefit more than 10,000 companies, will allow "create more than 200,000 quality jobs and generate 15,000 million dollars of annual exports."

The official initiative includes tax advantages for the generation of work, facilities to start businesses and benefits for productive innovation centers throughout the country, among other aspects.

"The knowledge economy is transforming the world and Argentina has competitive advantages to be a regional leader in these activities that create quality employment and improve competitiveness," said Minister of Labor and Production, Dante Sica.

The news was also very well received by the entrepreneurial sector. In this sense, Juan Martín Rodríguez, Executive Director of the Center for Entrepreneurship of the School of Business Administration (IAE) of the Austral University, affirms to iProUP that it is an "excellent" news for two reasons:

- "It benefits sectors that are within the areas sought by investors, which are initiatives of easy recapitalization, such as Artificial Intelligence and Internet of Things, which in some cases are the core and in others are at the service of projects invested," he explains.

- Secondly, Rodríguez points out the other edge, which is not related to the tax benefit, but "for the stimulation to bring companies to professionals with a scientific profile, who are more receptive to generating papers than to positively impact on business."

Given the above, it is clear that the discouraging panorama presented by the local economy at the macro level has its B-side: those who bet on Argentine talent.

Known as "angel investors", they disburse capital and provide knowledge at the earliest stage of these developments in exchange for a shareholding in the company. This network of financiers is highly developed in Argentina - so much so that it is one of the leading countries in the entire region in this regard.

So much so that they meet in civil associations or in "clubs" to find talent: they group, train, advise and connect with these "idea managers".

Several investors belonging to a club can promote the same startup or several (each with its individual shareholding but participating together).

In turn, the clubs put at their disposal an offer of high potential entrepreneurs and even allow them to participate in the "behind the scenes" of the ventures.

In the country

Juan Giner, Executive Director of the Argentine Association of Private Capital, Entrepreneur and Seed (ARCAP), affirms to iProUP: "In these clubs community is generated, you learn and the investor is surrounded by peers who may have or greater knowledge of a particular issue or in any case different experiences to contribute."

This article was written and published in Spanish and has been translated into English via Google Translate. Click here to read the original article.

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May 14, 2019

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